Insurer’s deficit dropping after minor injury claims capped

VICTORIA — The Insurance Corp. of B.C. says its financial picture is improving four months after it put a cap on pain and suffering claims for minor injuries in car crashes.

ICBC CEO Nicolas Jimenez said preliminary figures show the corporation on track to meet its financial targets for the year, which call for a small loss after two years of huge losses.

“It is early,” Jimenez said Tuesday. “We have a sense of what we’re seeing, but also enough judgment to say let’s not get excited too early.”

The number of people hiring personal injury lawyers has dropped significantly. Roughly 80 per cent of all crash claims are being directed away from the courts and to a new resolution tribunal.

ICBC lost almost $2.5 billion in the past two years as claims, legal fees and repair costs skyrocketed. The B.C. government intervened on April 1 to set a $5,500 cap on pain and suffering claims for minor injuries. The cap is supposed to save ICBC $1 billion this fiscal year and stabilize the Crown auto corporation’s finances to a $50-million loss in 2019-2020.

“Anecdotally, I’d say we’re on track, which is to still lose $50 million,” said Jimenez. “We’re optimistic but we’re also realistic.”

ICBC’s losses grew so large in the past two years that the Crown auto insurance agency threatened the stability of the provincial budget. Several problems remain. One is a court challenge by the Trial Lawyers Association of B.C. against retroactive limits that government placed on the use of medical experts in trials. A court ruling is expected soon. If the government loses, ICBC will have to record a $400 million to $500 million loss this year, said Jimenez.

The Trial Lawyers Association declined to comment Tuesday.

Another problem is roughly 110,000 crash claims that were filed before the April 1 cap and have yet to be settled.

ICBC estimates those claims to amount to $12 billion, but says costs are rising due to a jump in claimants arguing for compensation due to harm to their future employment and wages. Courts are increasingly awarding judgments in the hundreds of thousands of dollars, said Jimenez.

“If this is a trend, and we’re starting to see that it is, we’re going to have continued pressure on all those old claims that start out very small and turn into something much bigger,” said Jimenez.